Used car buyers are 11 times more likely to enter their personal details into a dealer’s online motor finance facility if it doesn’t leave a footprint on their credit record, new research from iVendi shows.
James Tew, CEO, said that offering potential customers the option to make a “soft search” and look at a range of suitable offers was crucial to ensuring that the potential of online motor finance was optimised – but was also ethical, too.
“An increasing number of customers are becoming better informed about how a hard search can potentially damage their credit rating, especially if they make a number of applications in a short period of time.
“Yet very few motor finance providers provide the opportunity to make a soft search online. This is both counterproductive and also, in our view, is simply not fair on the customer, who is often just going through the process of looking for the best deal.
“Fundamentally, the act of making a number of applications in a short period of time
should not make it more difficult and potentially more expensive to access motor finance in the future unless there is good evidence that the applicant is a poor risk.”
James said that dealers and finance providers should provide soft searches to give customers the ability to view a range of options to provide choice based on eligibility first and pricing second.
“There are various different technological solutions to providing a soft search online and our research suggests that dealers and finance providers shouldn’t waste time in adopting them.”
For the last five years, iVendi has been offering Car Finance Checker, which has evolved to make it easy for vehicle buyers to check out their finance eligibility as often as they like with no impact on their credit rating.
“A rapidly increasing number of people are buying motor finance online and dealers should be meeting that need by choosing the right technology. Certainly, we know that finance applications increase dramatically where soft searches are provided.”
iVendi’s research is based on analysis of applications processed through its platform during Q4 of 2017.